SMM Analysis: Competitive Landscape and Hot Topics in China's Aluminum Plate/Sheet, Strip and Foil Industry [SMM Aluminum Industry Conference]

On April 16, at the AICE 2025 SMM (20th) Aluminum Industry Conference and Aluminum Industry Expo — Aluminum Plate/Sheet, Strip and Foil Industry Development Forum, co-hosted by SMM Information & Technology Co., Ltd., SMM Metal Trading Center, and Shandong Aisi Information Technology Co., Ltd., and co-organized by Zhongyifeng Jinyi (Suzhou) Technology Co., Ltd. and Lezhi Qianrun Investment Service Co., Ltd., Ding Ruoyu, Senior Consultant of SMM Consulting Division, provided a brief analysis of the competitive landscape and hot topics in China's aluminum plate/sheet, strip and foil industry. The Rise of New Energy: Challenges and Opportunities Coexist in China's Aluminum Plate/Sheet Industry Driven by new energy development, future aluminum plate/sheet consumption is expected to grow, while frequent global trade frictions pose challenges. The rise of new energy brings both challenges and opportunities to the aluminum plate/sheet industry. According to statistics, production increased from 10.3 million mt in 2017 to over 13.4 million mt in 2024. In recent years, China's aluminum plate/sheet production has continued to rise significantly. This trend is not accidental, reflecting the country's robust economic development and strong demand for basic materials, marking a new development stage for China's aluminum plate/sheet industry. In the aluminum plate/sheet sector, can lid material saw a significant increase of 22% YoY in 2024. In the aluminum foil sector, electronic foil, double zero foil, and battery foil increased by 18%, 16%, and 34% YoY, respectively. According to SMM survey statistics, there are currently 30 clear ongoing aluminum plate/sheet, strip and foil projects nationwide, with a total designed capacity of over 6 million mt, and several projects yet to be confirmed. By product, battery foil and aluminum plate/sheet for new energy, as well as brazing materials, are the main expansion projects. By region, the ongoing capacity is mostly concentrated in major aluminum plate/sheet, strip and foil production provinces such as Yunnan and Jiangsu. According to SMM survey statistics, there are currently 30 clear ongoing aluminum plate/sheet, strip and foil projects nationwide, with a total designed capacity of 4.71 million mt, and several projects yet to be confirmed. By product, battery foil and secondary aluminum plate/sheet are the main new projects. Among the 30 projects, 13 are related to battery foil, with a total designed capacity of 1.1 million mt. Several companies have already laid out plans for secondary aluminum plate/sheet, with related projects totaling a designed capacity of 1.57 million mt. By enterprise scale, the ongoing capacity is almost entirely owned by large enterprises. The concentration of capacity in the aluminum plate/sheet, strip and foil industry is gradually increasing. By region, the ongoing capacity is mostly concentrated in major aluminum plate/sheet, strip and foil production provinces such as Henan, Jiangsu, and Zhejiang. New aluminum plate/sheet projects are relatively concentrated in Henan, while new aluminum foil projects are relatively concentrated in Jiangsu and Zhejiang. The terminal structure continues to adjust. Driven by plastic restriction policies and lightweighting policies, the proportion of aluminum plate/sheet, strip and foil products used in packaging and transportation has increased. Although profit margins may shrink in recent years, production can still grow against the trend, represented by products such as automotive sheet and battery foil, while the proportion of aluminum plate/sheet, strip and foil products with relatively low added value, such as industrial machinery and architectural decoration, is expected to continue to decline. The increase in NEV penetration drives the rise in aluminum usage per vehicle and the consumption of plate/sheet and foil. Two departments adjust the export tax rebate policy for aluminum semis. On November 18, 2024, the "Announcement of the Ministry of Finance and the State Taxation Administration on Adjusting the Export Tax Rebate Policy" was released, canceling the export tax rebate for some aluminum semis (specific list is shown in the table below), effective December 1. The cancellation of the aluminum semis tax rebate has limited long-term impact on aluminum and aluminum semis prices. In the short term, this policy change will suppress aluminum semis exports, becoming a bearish factor for aluminum prices. However, as China is a major global supplier of aluminum semis and there is a continuous gap in overseas aluminum semis supply, this policy change is unlikely to significantly reduce China's aluminum semis exports in the medium and long term. The increased costs will also be partially or fully passed on to downstream customers, with limited impact on domestic aluminum prices. SMM Analysis: In the short term, the cancellation of the aluminum semis export tax rebate may increase the export costs of aluminum semis export enterprises, suppress the export enthusiasm of China's aluminum semis processing enterprises, and be bearish for aluminum prices. In the medium and long term, as China is a major global exporter of aluminum semis and there is a certain gap in overseas aluminum semis supply and demand, the phased reduction in China's aluminum semis exports and the increase in export costs can push up overseas aluminum prices, widening the price spread between domestic and overseas aluminum prices. Without considering exchange rates, the export profits of domestic aluminum semis will rebound, potentially gradually restoring China's aluminum semis export volume. Additionally, the limited growth in overseas aluminum semis production means China's aluminum semis still have good overseas opportunities, and the tax costs will be passed on to the overseas buyer market. China's cancellation of the aluminum semis export tax rebate suppresses domestic enterprises' export enthusiasm in the short term but is conducive to the development of high-value-added product exports in the medium and long term. The aluminum products affected by the cancellation of the export tax rebate almost cover all major domestic aluminum extrusion, aluminum plate/sheet, strip and foil, and aluminum bar and rod products. Impact and Analysis: For many years, due to policy advantages and the product advantages of China's aluminum semis, China's aluminum semis have maintained a competitive advantage of being high-quality and low-cost in overseas markets. In the short term, the cancellation of the aluminum semis export tax rebate may increase the export costs of aluminum semis export enterprises, suppress the export enthusiasm of China's aluminum semis processing enterprises, and the aluminum processing industry may face a "pain period" lasting about half a year. However, the industry's major reshuffle is also a rare new opportunity. In the medium and long term, as China is a major global exporter of aluminum semis and there is a certain gap in overseas aluminum semis supply and demand, the phased reduction in China's aluminum semis exports and the increase in export costs can push up overseas aluminum prices, widening the price spread between domestic and overseas aluminum prices. Without considering exchange rates, the export profits of domestic aluminum semis will rebound, regaining related advantages and thus restoring China's aluminum semis export volume in the medium and long term. Additionally, the cancellation of the aluminum semis export tax rebate does not involve high-value-added aluminum products, which will also stimulate domestic aluminum export enterprises to develop towards high-value-added product exports. The US policy of imposing a 25% tariff on all aluminum and steel imports to the US has limited impact on China's aluminum product exports but may increase local spot premiums in the US, further raising procurement costs for US domestic enterprises. Additionally, it is necessary to be vigilant about changes in US domestic consumption demand and pay attention to demand trends in other overseas regions. At this stage, China's direct exports to the US account for a limited proportion, with core risks focusing on the sustainability of transshipment trade channels — if the US initiates a full industry chain traceability review mechanism for aluminum or simultaneously imposes punitive tariffs on transshipment countries, it will substantially change the existing trade landscape. Click to view the special report on the AICE 2025 SMM (20th) Aluminum Industry Conference and Aluminum Industry Expo.

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